What’s ahead for the proxy season? Here’s what to look for

This year’s proxy season will be starting soon. So what will it bring? David A. Bell of the firm Fenwick & West has written up a client advisory for those who don’t like unpleasant surprises.

“The picture emerging from the filings as well as recent news reports indicate that the ground is shifting and near‑term shareholder value is no longer the only consideration for the C-Suite,” he writes. “Nearly 200 leading chief executives signed a groundbreaking Business Roundtable statement in August saying that companies ‘must also invest in their employees, protect the environment and deal fairly and ethically with their suppliers.’ Institutions in the United Kingdom followed the Roundtable’s lead a few months later, and in December the World Economic Forum released a Davos Manifesto outlining ethical principles for corporations to follow.

Specifically, here’s what to look for:

  • Increased Opposition to “say-on-pay” proposals. Data from ISS Analytics show that opposition rates to these proposals are inching up and are at the highest levels since they were first introduced to U.S. ballots in 2011.
  • CEO pay: still up, amid more shifts to stocks. These larger CEO compensation packages, Bell says, rely more heavily on stock-based compensation. For the first time, CEOs at large companies saw the stock portion of their compensation cross the threshold of 50%.
  • Women, ethnic minorities take more board seats. And pay equity remains a big issue. ISS and Spencer Stuart data also showed that women and ethnic minorities are joining boards of directors at rates never before seen.
  • Support grows for environmental and social disclosures. The volume of proposals to address environmental and social concerns rivaled or outpaced other governance proposals for the third year in a row, as shareholders of Silicon Valley companies sought information about political spending, board diversity, human rights and sustainability.

Read the entire note to get the details.

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